One of San Diego County’s hottest commercial property sectors in 2013 was the apartment market and Jones Lang LaSalle’s Capital Markets group looks for the trend to continue well into 2017. The San Diego office of JLL recently closed one of the largest multifamily trades on the California coast, and expects more multifamily opportunities because the sector continues to have the strongest fundamentals in the San Diego commercial real estate market.
The Coronado Bay Club was acquired for $161.5 million by a joint venture between Alliance Residential and a large institutional investment fund. Executive Vice President Darcy Miramontes and Vice President Kip Malo led the Jones Lang LaSalle (JLL) team on this transaction, along with International Director Jubeen Vaghefi and Managing Director David Young. According to Miramontes, there was tremendous interest in the marquee waterfront property. “Ultimately, it was Coronado Bay Club’s history of strong performance, stellar location and well maintained property that made it so appealing to Alliance.”
Miramontes says, “investors are very bullish on San Diego’s multifamily sector because of the strong fundamentals — rent growth is expected to be 3 to 5 percent through 2017 and vacancies across the county are upwards of 5 percent, while in some submarkets as low as 2 to 3 percent.”
Miramontes also points to employment as a reason for renewed local interest. “Job growth is going to be over 30,000 for the next several years, spread across multiple industries, including tech and biotech… after several months of lackluster job growth, this is fostering even more buyers to look at the San Diego market.”
She also sees San Diego’s high housing costs as an investment advantage. “It’s very expensive to own a home in San Diego – 30 percent above the national average. This keeps a lot of the population in San Diego as renters and that helps with occupancy and vacancy moving forward.”
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